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Legacy Soil & Stone — v3 Financials (DRAFT rev 2)
Companion to the v3 master proposal. Volume model rebuilt against Mark's grounded numbers — Year 1 = 10 Stream A orders/month + 3 Stream B orders/month. Operating expenses now itemized.
1. Stream A unit economics (Memorial Pearls)
COGS includes binder, pigments, cremains-slurry materials, sealant, polishing supplies, packaging, shipping carton, and apportioned aggregator consumables. Excludes Mark's labor (treated as operator draw, not COGS — see §5).
| Tier | Cremains | Pearls | Price | COGS (est.) | Gross profit | Margin |
|---|---|---|---|---|---|---|
| XS | < 0.5 lb | 1-3 | $250 | $22 | $228 | 91.2% |
| S | 0.5-1 lb | ~25 | $475 | $42 | $433 | 91.2% |
| M | 1-2 lb | ~45 | $695 | $68 | $627 | 90.2% |
| L | 2-4 lb | ~70 | $995 | $98 | $897 | 90.2% |
| XL | 4-9 lb | ~85 | $1,295 | $135 | $1,160 | 89.6% |
| Blended (mix-weighted) | ~$735 | ~$73 | ~$662 | ~90.0% | ||
Stream A blended margin lands at ~90% on the simpler product mix (no concrete casting, no Marble Method finishing). Operator labor sits in the operator draw, not COGS.
2. Stream B unit economics (Private NOR + Cedar Vessel)
Stream B restructured per April-11 research: 3 tiers, standardized 1.5 cu ft return + standardized hand-built cedar planter for every tier. Pricing scales with vessel cycle complexity (JK270 dual-chamber for Tiny vs JK400 for Small-Medium and Large), not output volume. COGS includes cedar planter materials + finish, NOR vessel consumables, soil packaging, shipping, certificate. v2's Bloom-tier baseline ($475 → $70 COGS at 85.3%) carried forward as the consistent cedar-piece cost.
| Tier | Pet weight | Vessel cycle | Return | Price | COGS (est.) | Gross profit | Margin |
|---|---|---|---|---|---|---|---|
| Tiny | < 10 lb | JK270 dual | 1.5 cu ft + cedar | $475 | $70 | $405 | 85.3% |
| Small-Medium | 10-30 lb | JK400 dual | 1.5 cu ft + cedar | $675 | $80 | $595 | 88.1% |
| Large | 30-40 lb | JK400 full | 1.5 cu ft + cedar | $895 | $95 | $800 | 89.4% |
| Blended (mix-weighted) | ~$634 | ~$78 | ~$556 | ~87.6% | |||
Mix weighting per Pet_Weight_Vessel_Sizing research: Tiny 35%, Small-Medium 52%, Large 13%. Tiny tier carries the lowest margin because the standardized cedar planter is a fixed share of a smaller revenue base; Small-Medium and Large each clear 88%+.
Surplus from Large tier (pet yields 2.5-3 cu ft vs 1.5 cu ft delivered) goes to the Unconditional Forest mother pile at the workshop.
3. Line 3 — Community Composting (pass-through to shelters)
| Item | Amount | Notes |
|---|---|---|
| Customer fee | $150 | Single price, no weight tier — communal vessel |
| Direct cost per participant | $30 | Intake handling, batch labeling, soil bag, packaging, shipping |
| Net proceeds donated to shelter partner | $120 | Year-end donation receipt totaled across program |
| Legacy retained margin | $0 | Operating costs absorbed; not booked as Legacy revenue |
4. Year 1 → Year 2 → Steady-state revenue projections
Volume baseline: Year 1 = 10 Stream A orders/month + 3 Stream B orders/month = 120 + 36 annually. Year 2 ramp = 2.5× as regional reach builds. Year 3 onward = steady-state at Year 2 volumes — the business intentionally does not chase compounding growth past maturity. Workload, artisan pace, and operator capacity are the constraint, not market size.
| Year | Stream A orders | Stream A revenue | Stream B orders | Stream B revenue | Total revenue | Gross profit |
|---|---|---|---|---|---|---|
| Year 1 (Validation) | 120 | $88,200 | 36 | $22,824 | $111,024 | ~$99,400 |
| Year 2 (Maturity) | 300 | $220,500 | 90 | $57,060 | $277,560 | ~$248,400 |
| Year 3+ (Steady-state) | 300 | $220,500 | 90 | $57,060 | $277,560 | ~$248,400 |
Stream A blended price ($735) × volume; Stream B blended price ($634) × volume. Mix assumption per Pet_Weight_Vessel_Sizing research. Year 3+ holds at Year 2 maturity volumes — the brand is built around a workshop pace, not a growth pace.
5. Operating expenses
| Line item | Year 1 | Year 2 / Steady-state |
|---|---|---|
| Operator draw (Mark's salary) | $54,000 | $54,000 |
| Marketing budget | $5,000 | $8,000 |
| Insurance (general liability + memorial-services) | $1,500 | $1,800 |
| Misc operating (utilities, supplies, software, freight overhead) | $5,000 | $8,000 |
| Total operating expenses | $65,500 | $71,800 |
6. Net income projection
| Year | Revenue | Gross profit (~88%) | Operating expenses | Net income (pre-tax) |
|---|---|---|---|---|
| Year 1 | $111,024 | ~$99,400 | $65,500 | ~$33,900 |
| Year 2 (Maturity) | $277,560 | ~$248,400 | $71,800 | ~$176,600 |
| Year 3+ (Steady-state) | $277,560 | ~$248,400 | $71,800 | ~$176,600 |
Year 1 net is positive after the $54K operator draw — the business covers Mark's salary and produces ~$33K of additional retained earnings in the validation year. Year 2 reaches maturity volume and clears the operator draw three times over in surplus. Year 3+ holds at Year 2 levels by design.
7. Line 3 community-program flow (donations to shelters)
| Year | Community participants | Pass-through to shelters (donation total) |
|---|---|---|
| Year 1 | ~30 | ~$3,600 |
| Year 2 (Maturity) | ~80 | ~$9,600 |
| Year 3+ (Steady-state) | ~80 | ~$9,600 |
Line 3 numbers don't appear on Legacy's revenue ledger. These are donation-receipt totals to shelter partners — useful for the brand story, the academic-outreach narrative (Line 4), and the year-end shelter-partnership reports.
8. Capital — two paths
Dream path: $120,000 - $130,000
The dream is not bigger margin or faster ramp. The dream is the land. Twenty to forty acres in the North Georgia foothills — pasture for the soil program, forest the soil itself feeds back into, a creek the workshop sits beside, a pond. A purpose-built workshop with the aggregator pan, the painting bench, the curing room, the cedar build station. Soil from the Community Composting line goes into the field. Cremains-fed pearls cure in a room that smells like cedar and wood polish.
Customers visit if they want to. Most never need to — the land does its work whether anyone watches or not.
What the Dream path buys: a permanent home for the workshop, the land asset itself as long-horizon collateral, and the time and quiet to build at the artisan pace this work asks for. Same product, same pricing, same lines — on the right ground.
9. Breakeven and capital recovery
Solid path: Year 1 net (~$33.9K) covers the lower bound of startup capital ($33K) within Year 1 at projected volume. Year 2 net (~$176.6K) clears the full upper bound ($40K) over four times. The Solid path is operationally self-funding from Year 1 forward.
Dream path: operating economics unchanged from the Solid path. The land is the additional collateral, not amortized through operating cash flow. If structured as a long-horizon collateralized loan against the land, debt service comes out of Year 2+ net income.
10. Confirmed inputs
- Marketing $5K Year 1, $8K Year 2 onward
- Operator draw $54K/year
- Insurance $1.5K Year 1, $1.8K Year 2 onward
- Volume Y1 = 120 Stream A + 36 Stream B; Y2 ramp 2.5×; Y3+ steady-state at Y2
- Stream A blended margin ~90%; Stream B blended ~87.6%; Line 3 community = pass-through to shelters at $150/participant